Lumber futures dropped to the lowest level in over nine months after sawmills increased production and demand from builders stabilized. LBS down -2.42%, DXY down -0.14%
- September futures in Chicago dropped 4.4% to $482.90 per thousand board feet, the lowest for a most active futures contract.
- The decline signals a drop of over 70% from the record high posted in May.
- The high U.S. homebuilding demand during the pandemic led to a surge in orders for lumber, triggering prices to increase over 4-times to their May peak and fueling inflation concerns.
- RCM Alternatives Analyst Brian Leonard stated that sawmills increased output level in response, while a shortage of other building materials has dragged the pace of U.S. construction.
- Leonard further stated that most of the wood available is pegged for a job site.
- The industry has to progress through issues before the recovery of the production levels of Lumber in the mills.